NEWARK — The plight and future of downtown, small-town America has been a concern for several decades. Flight to the suburbs, not just by the population but by businesses to malls on the outskirts of town, has taken its toll on small towns across the country.
Ron Kitchens, chief executive officer of Southwest Michigan First and general partner of the Southwest Michigan Life Science Fund, spoke to a group of community leaders at the Midland Theater in Newark, Monday night. Kitchens is the author of the recently published book, “Community Capitalism: Lessons From Kalamazoo and Beyond.”
The book details the strategies used by Kalamazoo, Mich., and Southwest Michigan First to rethink and redefine economic policy for the city. The book details the region’s long-term strategy for economic growth by focusing community resources into five key areas: Place, capital, infrastructure, talent and education. While these are traditional areas of concern for many communities looking to improve their economic climate, Kitchens takes a different approach to them.
“What Kalamazoo has accomplished by pulling itself up by its own bootstraps during the past decade is truly extraordinary,” Kitchens explained. “The city has simply refused to become another dying Rust Belt town and its initiatives can inspire other communities to dig deep and mobilize their own resources. We believe that the principles of Community Capitalism can be replicated globally.”
The approach depends a lot on business-funded solutions to traditional economic problems facing small towns.
“It was a great opportunity to reinvent ourselves,” Kitchens explained. “We began to prioritize education, and provide capital for new companies and the expansion of existing companies; we focused on talent which is more than just people. It is the right person in the right place. It’s putting a person in the position they are hard-wired to succeed in. And it’s a focus on infrastructure, which used to mean roads and sewer lines and the like. We have redefined infrastructure to mean business incubators and facilities to create new entrepreneurs.”
The Kalamazoo Promise is one such example. Funded through anonymous donors, it has had a rapid and profound impact on the city by paying 65 percent to 100 percent of the tuition of every Kalamazoo public school graduate who enrolls in a Michigan state college or university, according to Kitchens.
“The Kalamazoo Promise, by all appearances, is a ground-breaking scholarship program,” he explained. “But the fact of the matter is, it didn’t start as a scholarship program. What we had was a city facing a budget crisis. The city manager came to us and said we were going to have to raise taxes and institute a personal income tax. Otherwise the city would be broke.
“We knew that personal income tax would be devastating,” he continued. “So a group of business leaders got together to talk about lots of solutions. They asked how we could get more families to move into the community.”
The solution was simple yet radical: the Kalamazoo Promise.
“What have we seen in three years?” Kitchens asked. “We’ve had 1,400 new students in the Kalamazoo school system. Dropout rates have been cut by 50 percent. Those people came from 35 different states and nine foreign countries. Most came without jobs and without knowing anything else other than they could find a job here.”
The heart of Community Capitalism is thinking in new ways and looking for new solutions rather than clinging to the old.
“Success is really taking one plus one and making it come out three, or maybe five,” Kitchens explained. “It’s really about figuring out a better way to do it.”